CBI chief warns of threat to jobs and growth from ‘cumulative burden’ of apprenticeship levy and national living wage

15:29 30 December 2015

CBI Director-General Carolyn Fairbairn, who has said that a "cumulative burden" on business, including an apprenticeship levy and new national living wage, risks costing jobs and hitting economic growth.

An industry leader has said a “cumulative burden” on business, including an apprenticeship levy and new national living wage, risks costing jobs and hitting economic growth.

Carolyn Fairbairn, director-general of the CBI, warned of the danger of “short-term” politics.

In a new year message, she highlighted a number of Government policies which will impact on firms in 2016, including the new £7.20-an-hour national living wage for adults from April.

“The Government has placed a number of extra strains on UK businesses that are adding up - the national living wage, the apprenticeship levy, pension auto-enrolment.

“Businesses want to reward their staff fairly but, as the burdens and costs accumulate, particularly in the retail sector, growth risks being cut off and jobs lost.”

The CBI leader said businesses struggled to invest when rules “repeatedly change”.

The UK economy had performed well, creating many jobs, but the chances of a prosperous future could be undermined by the short-termism of politics, she warned.

A top priority for business is skills, but Ms Fairbairn said the planned apprenticeship levy risked failure through poor design, while the UK’s “wrong-headed” visa policies were making skills shortages worse.

The new levy aims to raise more than £3million, but the CBI boss said the scheme did not have a clear delivery system and risked failure due to “chasing blunt targets”.

On the UK’s future in Europe, she said the public deserved to hear informed arguments from both sides ahead of an expected referendum in 2016.

“We will provide clear evidence, share case studies from businesses of all size and sectors, host debate and discussion, evaluate reforms as they are achieved and faithfully report the views of our members.”